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N80bn Unclaimed Dividends: Banks, Registrars to Appoint E-Dividend Champions

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Godwin Emefiele on banking

As part of measures to address the rising trend of unclaimed dividends in the nation’s capital market, which has hit the N80 billion mark, banks and registrars have been mandated by both the Central Bank of Nigeria, CBN and the Securities and Exchange Commission, SEC to set up e-dividend champions in their respective institutions.

Also, work is underway to address overlapping functions between the Debt Management Office, DMO and SEC, just as the commission is to use moral suasion in attracting telecommunication companies, oil and gas and other blue chip companies to list on the Nigerian Stock Exchange, NSE.

It was also gathered that the commission is canvassing for tax concessions that will attract more investment into the capital market.

The National Assembly is working closely with the DMO and SEC to address the overlapping functions observed in the discharge of duties by both organisations.

Specifically, the Director General of SEC, Munir Gwarzo confirmed that work is underway to address the overlapping functions in both institutions.

According to him “Very soon we will give you the details where there are overlapping functions between the two institutions.” The SEC DG further hinted that the CBN will also sanction banks that fail to comply with the free e-dividend mandate which is expected to end on 31st December 2016.

Gwarzo said attaching deadline to e-dividend registration was necessary to ensure compliance by investors, observing that any bank that fails to comply with free mandate processing on e-dividend will be duly sanctioned.

He said “SEC has been in the vanguard for people to register for e-dividends, but whenever you go to the bank or any of the registrars, people tend to be frustrated because there seems to be some misunderstanding between the banks and the registrars.

So, we had a very successful meeting last Monday where we had all the registrars, all the heads of operations of banks, we also got the Director of Payment System of the CBN and Director of NIBSS and we sat down and exhaustively discussed the issue and we resolved that each bank is going to appoint an e-dividend champion and CBN will as well direct the banks to have these e-dividend champions.

“The e-dividend champion will be the one that will liaise with the head of operation of each bank and every registrar is also expected to have e-dividend champion. We agreed that every Compliance Officer for every registrar will serve as e-dividend champion.

We also agreed that any time the registrar or the banks have any issue that requires clarification, Nigeria Inter-Bank Settlement System, NIBSS will provide the clarification. The registrars also agreed that whenever they have any issue with respect to identity of an investor, within three to four days, they will reach out to the bank or NIBSS.”

He explained that once an investors registers for e-dividend, the backlog of his/her unclaimed dividend that are not yet status-barred would be credited to his account by his registrar. He added that SEC would continue to underwrite the registration for e-dividend until December 2016, saying that registration after the stipulated timeline would attract a token fee.

As part of its advocacy programme, he said the commission has met with all the strata of the government in an effort to get their buy-in to the Capital Market Master Plan and recently with the Minister of Finance, Mrs Kemi Adeosun, with regards to considering tax concessions that will attract more investment into the capital market.

“The Capital Market Master Plan Implementation Committee, CAMIC, met the President of the Federal Republic of Nigeria; we also met the Governor of the Central Bank, the Attorney General of the Federation, and Speaker of the House of Representatives. This is to ensure that we have their buy-in because for you to be able to implement the Master Plan successfully, you need the buy-in of the executive, legislature and the judiciary.

“You will recall that in February this year, we had a two-day session with the judiciary in which we discussed with them what the capital is, what the SEC is and largely what the Investment and Securities Act, ISA, so that we can get their support and cooperation.

We also had a two-day session with the National Assembly; SEC partnered with the Committee on Capital Market both at the House of Representatives and Senate and we had a very successful outing. That is part of our advocacy strategy so that we have all the levels of government buy into the master Plan.”

“Just last Saturday, we had very successful meeting with the Minister of Finance and we had in attendant the chairman of the Federal Inland Revenue Services, FIRS, and the DG of Debt Management Office, DMO. For the last 30 – 40 years, the capital market has been clamouring for certain concessions with respect to tax and certain capital market products which we believe that will further enhance the development of the market” the SEC DG added.

“We have no other place to invest our little funds than in our market and that is why we are trying to cultivate your appetite and the only way to do that is to address some of these issues. Once these issues are addressed and the retail investor returns, we will be able to raise participation in the market from 2 per cent it is now to about 4 per cent in the next 10 years.”

Continuing he said “The BVN platform that is being provided for the e-Dividend will also enable us to implement other initiatives in the market. For instance with the BVN platform everyone that operates in this market as an investor will have his data within this system, so if anyone wants to defraud, it cannot be done. People cannot impersonate others as the platform will expose them.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Energy

Unlocking Investments into Africa’s Renewable Energy Market

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green energy - Investors King

The African Energy Guarantee Facility (AEGF) is launching a virtual roadshow of free webinars allowing a deeper understanding of risk issues for renewable energy projects on the continent, and conversations around risk mitigation solutions. The first webinar will take place on Thursday, 23 September from 14:30-16:00 hrs. EAT. 

The session will be oriented on how to get more energy projects from the drawing board to the grid. While the energy demand in African economies is expected to nearly double by 2040, and although the potential for renewable energy is 1,000 times larger than the demand, only 2GW out of almost 180GW of this new renewable power were added on the African continent.

Clearly not good enough! To improve the situation within the next two decades, new solutions need to be implemented urgently. De-risking and promoting private sector investments will play a crucial part of it.

In this 90-min interactive session, AEGF partners: the European Investment Bank (EIB), KfW Development Bank, Munich Re and the African Trade Insurance Agency (ATI) will share their experience and provide valuable insights on how they were able to come together and design practical solutions for investors and financiers of green energy projects in Africa aligned with SDG7 objectives.

Across Africa, the complexity of renewable energy projects and their long tenors hold back crucial energy investment. Tailored to the specific needs and risk profiles of sustain­able energy projects, AEGF will tackle the investment challenge by providing underwriting expertise and capacity tailored to market needs.

The AEGF will significantly boost private investment in sustainable energy projects, both expanding access to clean energy and contribute to achieving UN Sustainable Development Goals. The scheme supports new private sector investment in eligible renewable energy, energy efficiency and energy access projects in sub-Saharan Africa.

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Energy

Shell Signs Agreement To Sell Permian Interest For $9.5B to ConocoPhillips

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Shell profit drops 44 percent

Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has reached an agreement for the sale of its Permian business to ConocoPhillips, a leading shales developer in the basin, for $9.5 billion in cash. The transaction will transfer all of Shell’s interest in the Permian to ConocoPhillips, subject to regulatory approvals.

“After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition,” said Wael Sawan, Upstream Director. “This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”

Shell’s Upstream business plays a critical role in the Powering Progress strategy through a more focused, competitive and resilient portfolio that provides the energy the world needs today whilst funding shareholder distributions as well as the energy transition.

The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet. These distributions will be in addition to our shareholder distributions in the range of 20-30 percent of cash flow from operations. The effective date of the transaction is July 1, 2021 with closing expected in Q4 2021.

Shell has been providing energy to U.S. customers for more than 100 years and plans to remain an energy leader in the country for decades to come.

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Crude Oil

Oil Gains 1 Percent on Possible Tight Supply 

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Oil prices - Investors King

Oil prices rose on Tuesday as analysts pointed to signs of U.S. supply tightness, ending days of losses as global markets remain haunted by the potential impact on China’s economy of a crisis at heavily indebted property group China Evergrande.

Brent crude gained 95 cents or 1.3% to $74.87 a barrel by 0645 GMT, having fallen by almost 2% on Monday. The contract for West Texas Intermediate (WTI) , which expires later on Tuesday, was up 91 cents or 1.3% at $71.20 after dropping 2.3% in the previous session.

Global utilities are switching to fuel oil due to rising gas and coal prices, and lingering outages from the Gulf of Mexico after Hurricane Ada that imply less supply is available, ANZ analysts said.

“While slowing Chinese economic growth and uncertainty around the (U.S.) Fed’s tapering timetable weighed on market sentiment, other developments still point to higher oil prices,” ANZ Research said in a note.

Still, investors across financial assets have been rocked by the fallout from heavily indebted Evergrande (3333.HK) and the threat of a wider market shakeout in the longer term.

“Evergrande’s woes are threatening the outlook for the world’s second-largest economy and making some investors question China’s growth outlook and whether it is safe to invest there,” said Edward Moya, senior market analyst at OANDA.

While that view of the state of China’s economy is weighing on markets, the U.S. Federal Reserve is also expected to start tightening monetary policy – likely to make investors warier of riskier assets such as oil.

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